Gold and Silver Fun and Games

This is just getting to be far too predictable.

Let's see, first it was the April12 gold. Then it was the May12 silver. Today it was the June12 gold. What do I mean? Today was, once again, one day prior to option expiration and today, once again, we get a round trip in the metal as the poor losers who are left trading and hedging get their arses handed to them by the controlling powers of The Cartel.

As a refresher, what we saw in March and April, we saw again today. Namely, the handful of poor saps who had sold put options on the front month, thinking they had free money (Wouldn't you have thought that selling the June 1550 put looked like a safe bet back in February? Heck, maybe even late last week?) Lo and behold late yesterday, with just two days left before expiration, gold gets smoked on the Globex and is driven below its 10-day MA. WOPR selling ensues and before you know it, gold is near 1550 and headed lower. YOU, the poor sap that is short 100 June puts, have no other option but to sell short 100 June12 contracts, just to hedge yourself. Your selling (and everyone else caught in the same vise) sends gold even lower, toward 1535. All of this selling is gladly soaked up by The Cartel until...snap, boom, bang...they spring the latch on the trap and begin rallying gold back higher. Your new short hedge is suddenly squeezed and you eventually cover. This is particularly likely once price rallies back through and above that personally dangerous 1550 level. With gold back at 1560, you are now left with your original 100 naked puts that will expire worthless at 1:30 tomorrow as scheduled, however, you were just lightened of some considerable funds by the coercive, manipulative power of The Gold Cartel. Wash, rinse and repeat next month in July silver if prices continue down at these levels.

The selling of yesterday and today has established the basing/trading ranges that we began to discuss here yesterday. See this for a refresher: https://www.tfmetalsreport.com/blog/3818/not-so-happy-tuesday Of that post, this line in particular is the most relevant:

"Now, please don't misunderstand what I'm telling you here. I'm still extremely excited about where the metals are headed, particularly silver. The ranges I've described above are for the short term, maybe the next week or two and into early June."

Here are your charts that show these new ranges:

Here are some other nuggets that I've picked up as I've gone through the day. First, Jesse had this little ditty about KosherDakota who, as you know, is one my favorite Fed douchebags. This guy is a complete clown. Anyway, the speech Jesse references is not the first time KD has muttered this current bit of nonsense. I actually saw a headline on ZH about a week ago where this buffoon said the same thing that he said today. I was going to write about it at the time but by the time I doubled back to C&P it, the ticker had moved on. At any rate, enjoy the nonsense. http://jessescrossroadscafe.blogspot.com/2012/05/feds-kocherlakota-i-reject-your-reality.html

Trader Dan has a good comment today on commodities, in general. He also made an appearance on KWN. I highly recommend both: http://www.traderdannorcini.blogspot.com/2012/05/continuous-commodity-index-fed.html & http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/5/23_Norcini_-_Central_Bank_Gold_Buyers_Battling_Hedge_Funds_Today.html

If you haven't yet, you should speed through this. I often listen to Coast-to-Coast as I'm shuttling LT#1 back and forth to ballet class. I caught part of this episode the other night. The stuff with Peter Schiff is definitely pertinent and well worth your time.

And this is interesting. With the FB/silver spread now at just $4 or so, can the closure of the latest Hat Contest be very far away? http://www.marketwatch.com/story/how-facebook-could-destroy-the-us-economy-2012-05-22?pagenumber=1

Have a great evening!  TF

234 Comments

ivars's picture

German people (voters)  are

EUR will not recover anytime soon, the trend is still down to at least 1,2 - 1,15.

German people (voters)  are exceptionally principal about paying others what they have not earned, and Merkel politically is in the corner. So I expect further delays in action that could save Greece by money  printing or even more remotely, Eurobonds. It will come, but always too little, too late at least until next German federal  elections,  which if it is  a regular election,  will be held on a Sunday or holiday between 1 September and 27 October 2013.

Groaner's picture

I got a feeling. "Today is going to be a really good Day"

Motivation!

Xty's picture

Good Morning - Go Team Go!

Now what is wrong with a cheerleading mentality?  Dang, my daughter was a cheerleader and they were an incredibly hard-working and devoted bunch of girls.  I know that sarcasm has been evicted from the site (which I too find great and excellent, and  I too am bullish in the long term) and that when I suggest people are perhaps somewhat randomly suggesting downs for gold that have been as low now as 1000, I cause Dr G gas, but I will stand up when we are accused of cheerleading or blind faith, and the accuser is telling people not to invest in precious metals (I know, he said now, and for the rest of the year).  I know lots of people that when I mention gold again, they say 'but it is so expensive now'.  To which I reply 'arghh', and start again with explaining that the paper is worthless so you need lots of it.

So without engaging in cheerleading, blind-faith, or tons of absolutes, I would like to suggest that you buy when you can afford to.  Nobody can know the future, but that is a poor reason for not preparing for it.

                               

ClinkinKY's picture

Morning Toons

ClinkinKY's picture

"You Can Fool Some Of The People....

ClinkinKY's picture

Bullshifter

ClinkinKY's picture

And finally...

cTOON-One_0524.jpg.cms

Groaner's picture

the metals are smoking this morning!

I knew Fergi would get things going.

Xty's picture

Those are the Steelerettes, btw

"The Steelers cheerleaders, who were called the Steelerettes, were disbanded after the 1969 season. They wore hard hats. How cute was that? They were college kids. It was just a few years after the Steelerettes ceased to exist that the Dallas Cowboys Cheerleaders — a version of which had been around since 1960 — became a phenomenon and created the template for the modern NFL cheerleader. The Steelers never did get back in the game, though, and still don’t have a cheerleading squad. Imagine."

http://www.salon.com/2009/01/30/super_bowl_2/

Xty's picture

re smoking metals

the question, my dear Groaner, is what are they smoking.  I sure hope it gets them high, whatever it may be.

Groaner's picture

I put a sell in last night thinking the Asians would be

buying like crazy.. but the good old boys were very busy at 3AM, there calling card.

BUT, they are making up for it now.

Xty's picture

on the hunt for denials of Greek euro exit

Noonan's officials deny plan for Greek euro exit

By Fionnan Sheahan and Sarah Collins in Brussels

Thursday May 24 2012

TAOISEACH Enda Kenny witnessed the new strained relations between the EU's heavy-hitters first-hand last night as France and Germany clashed over eurozone countries clubbing together to borrow money.

As the euro crisis over Greece continues to escalate, Finance Minister Michael Noonan's officials denied that they had been told to draw up emergency plans to deal with a Greek exit from the single currency.

But EU leaders continue to bicker over the solution to the problems in the euro and supports for struggling countries, including Ireland.

German Chancellor Angela Merkel is believed to have stuck to her guns on the contentious issue of the joint issuing of bond, known as eurobonds, which the new French President Francois Hollande is pushing heavily...

http://www.independent.ie/national-news/noonans-officials-deny-plan-for-greek-euro-exit-3117682.html

Xty's picture

denial # 2 - categorically, and from horse's own mouth

Athens denies eurozone preparing for Greek exit
Posted: 24 May 2012 0106 hrs

ATHENS: The Greek government denied Wednesday that eurozone officials had recommended member countries prepare for Greece's possible departure from the currency bloc.

"The Greek finance ministry categorically denies the reports that it was requested during a Eurogroup telephone conference that eurozone members prepare plans for handling the possible exit of Greece from the eurozone," a government statement said.

The statement referred to media reports that cited a telephone conference of senior officials in Brussels held in preparation for an EU informal summit later Wednesday, at which leaders are due to discuss Greece.

"This kind of article does not correspond to reality but harms the efforts the country is making to deal with its problems," the Greek statement added....

http://www.channelnewsasia.com/stories/afp_world_business/view/1203197/1/.html

Groaner's picture

They will have to leave.. its all just talk.

There will be more riots, the peasants will not stay under the thumbs of the bankers, they will default and say bye bye..

Xty's picture

denial # 3 - this time complete, not categorical

EC Denies Greek Exit Strategy Plan

May 18, 2012
The European Commission Friday said it is determined to keep Greece in the eurozone and isn't working on an exit plan.

EU Trade Commissioner Karel De Gucht was quoted by a Belgian newspaper as saying the EC and European Central Bank were working on an emergency plan in the event Greece drops the euro and defaults on its obligations, ekathimerini.com reported. 

"We completely deny that we are working on any such emergency plans," a representative told Market News International. 

"We are concentrating all our efforts on supporting Greece and keeping it in the eurozone." 

...
 
boatman's picture

pheonix gains n pains

i get his free stuff....tooo sensational n over the top for me to pay him for something.

but thats just ME.

Xty's picture

denial # 4 - this is too easy - the ECB denies 'official' talk

ECB council member denies official talk of Greek euro exit

European Central Bank Governing Council member Andres Lipstok has denied that the ECB has held any formal talks on the possibility of Greece leaving the eurozone, although he admitted that unofficial discussions may have taken place.

“We never officially talked about an exit,” he told Bloomberg in an interview. “Maybe there were some non-official talks of council members outside the council. We have to be very careful about what we say in order not to create any speculation, especially since we officially didn’t speak about the possibility of an exit.

“Different groups, the finance ministers for example, are speaking more openly about it and it’s understandable.”...

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_23/05/2012_443495

Xty's picture

a more informative article - even if they have no real options

Eurozone Talks Rumble On Into The Night

12:51am UK, Thursday May 24, 2012

Robert Nisbet, Europe correspondent

Europe's leaders have been under mounting pressure as talks in Brussels stretched into the night on the eurozone crisis.

The summit was due to end in the evening but leaders have only just held their closing news conference.

Earlier, the Greek government insisted that eurozone officials did not recommend member countries prepare for Greece's possible departure from the single currency.

A statement issued by the country's government said: "The Greek finance ministry categorically denies the reports that it was requested during a Eurogroup telephone conference that eurozone members prepare plans for handling the possible exit of Greece from the eurozone."

Speaking as he arrived in Brussels for a meeting of European leaders, British Prime Minister David Cameron said: "We need a decisive plan for Greece to help get the European economies moving.

"But if we're not going to keep coming back - and back - to meetings like this, we also need to deal with some of the longer-term issues at the heart of running a successful single currency."

Meanwhile, French President Francois Hollande is expected to flex his political muscles at the meeting, as he pushes back against austerity in the eurozone.

It was anticipated he would propose a series of measures to promote growth when he meets the EU's 26 other leaders at an informal dinner organised by the European Council.

The informal summit comes amid increasing market uncertainty about Europe's ability to resolve the crisis, with main stock exchanges and the FTSE 100 in London down by 2% in Tuesday trading....

http://news.sky.com/home/business/article/16233421

 
achmachat's picture

best week ever

I don't know how it is for you guys, but I keep buying tubes of Libertads like a kid in candy store.

here in Europe, their premium is higher than for Philharmonics or Maples, but at these prices it's impossible to resist.

Torpedo Fish's picture

weak hands

a little hope that hedge/pension funds have closed all their gold longs already, so no more debilitating down moves

opticsguy's picture

Turdapalooza

I'm still pulling for Dallas.  Between both coasts, usually cheap airfare, and if Jim Willie shows up we can have a group picture on the Grassy Knoll.

I'm not sure if I want to support JPM/NYPD/Bloomberg by spending money in NYC.

Torpedo Fish's picture

ignore user

Turd, it would be nice to change 'ignore user' functionality a bit. Currently it shows a title and some info without a body. I think it would be cool to ignore completely those unwanted posts.

Xty's picture

re Turdapalooza

How about the great white north?  Then only Americans would have to deal with the TSA - only half kidding.  We have avoided flights that connect through the States whenever possible - traveling with my old mum makes it extra humiliating.  And we have awesome beer!  And cute cheerleaders!

(Old Canadian joke: why is drinking American beer like making love in a canoe? - apologies in advance, and I know that micro breweries are saving the day.)

Xty's picture

re ignore user

Torpedo Fish  - I think I disagree.  Even though there are a few people on my IU list, I do like to see the overall shape of the page and the overall sentiment.  And there are some persistent posters with consistent opinions that I am very aware of, and like to follow, but in the abstract so to speak.  There are conversations that go on between certain posters that I can easily skim that way, but also take a peak.  Much better than never knowing.  And sometimes I find I have been wrong - reacted to something that has either become trivial or been dealt with - and indeed, I have seen people's attitudes and opinions change and grow, and that is excellent.  So I do not see IU as a permanent banishment, more a blood-pressure control mechanism.  Sometimes it just reminds me not to respond - which does us all a favour.

Gramp's picture

And as If there was not Enough to Worry about...

  • NEW: Fire on USS Miami at shipyard in Maine was put out early Thursday
  • NEW: Seven were injured in the submarine blaze
  • The sub's reactor was not affected, and no weapons were aboard, officials say

(CNN) -- Firefighters extinguished a blaze in a nuclear submarine early Thursday at a U.S. Navy shipyard in Maine after battling it for hours, according to a statement released by the shipyard.

http://edition.cnn.com/2012/05/24/us/maine-submarine-fire/index.html?eref=edition

Gramp's picture

Kodak... What you never knew...

Kodak confirms it had weapons-grade uranium in underground lab

By Dugald McConnell and Brian Todd, CNN
May 16, 2012 -- Updated 0812 GMT (1612 HKT)

Dr Jerome's picture

EURUSD

Even my teen daughter is getting it! She sent me this image in an email last night.

Orange's picture

Jackass

This is a must read and reread. IRswaps are way above my head, although I understand the implications from the article. I really do not care any more what the paper price of gold is anymore. Things are happening more quickly now, especially since China is openly stating they they will become the reserve currency.

The article can be found at the bottom of Harvey's site. The jackass also mentions the Turd.

http://harveyorgan.blogspot.com/

After you have read and absorbed it, I would love to hear how we might profit/invest reasonably safely in this occurring. I don't mean physical PM's more on the lines of betting the subprime will blow up where Paulson made his billions.  

USTBond Tower of Babel Teeters

goldenjackass.JPG
By: Jim Willie CB, GoldenJackass.com

 
proton777's picture

China Gains Approval to Begin Trading Silver Futures

Snippet from Marketwire this morning.

"Silver will look to rally in 2012 on the emergence of Chinese Silver futures and increased fabrication demand. According to China Daily the Shanghai Futures Exchange recently gained approval to begin trading silver futures. 'There has been an absence of a means of trading in silver in China,'  Wang Ruilei, an analyst with precious metals trader CGS Co Ltd, said to China Daily. 'The market will be bigger and more liquid with the advent of these futures contracts.' "

Full article: 

http://finance.yahoo.com/news/china-gains-approval-begin-trading-122000768.html

koan's picture

Daily records

Anyone know the most the metals have gone up in a day (and the respective down records too I suppose)? And if more granular data available like intraday low/hi etc would be interesting.

Just expecting some record breaking at some point - so want to know when I see it!

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